The core determinants of health expenditure in the African context

Some econometric evidence for policy

Vasudeva N. R. Murthy, Albert A. Okunade

Research output: Contribution to journalArticle

26 Citations (Scopus)

Abstract

This paper, using cross-sectional data from 44 (83% of all) African countries for year 2001, presents econometric model estimates linking real per-capita health expenditure (HEXP) to a host of economic and non-economic factors. The empirical results of OLS and robust LAE estimators indicate that real per-capita GDP (PRGDP) and real per-capita foreign aid (FAID) resources are both core and statistically significant correlates of HEXP. Our empirical results suggest that health care in the African context is technically, a necessity rather than a luxury good (for the OECD countries). This suggests that the goal of health system in Africa is primarily 'physiological' or 'curative' rather than 'caring' or 'pampering'. The positive association of HEXP with FAID hints that external resource inflows targeting health could be instrumental for spurring economic progress in good policy environments. Most African countries until the late 1990s experienced economic and political instability, and faced stringent structural adjustment mandates of the major international financial institution lenders for economic development. Therefore, our finding a positive effect of FAID on HEXP could suggest that external resource inflows softened some of the macroeconomic fiscal deficit impacts on HEXP in the 2000s. Policy implications of country-specific elasticity estimates are given.

Original languageEnglish
Pages (from-to)57-62
Number of pages6
JournalHealth Policy
Volume91
Issue number1
DOIs
StatePublished - Jun 2009

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Health Expenditures
International Cooperation
Economics
Econometric Models
Social Adjustment
Economic Development
Elasticity
Health
Delivery of Health Care

All Science Journal Classification (ASJC) codes

  • Health Policy

Cite this

The core determinants of health expenditure in the African context : Some econometric evidence for policy. / Murthy, Vasudeva N. R.; Okunade, Albert A.

In: Health Policy, Vol. 91, No. 1, 06.2009, p. 57-62.

Research output: Contribution to journalArticle

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